Matawan Aberdeen Regional School District

Transcription

1 Auditor's Management Report for the Matawan Aberdeen Regional School District in the County of Monmouth New Jersey for the Fiscal Year Ended June 30, 2016

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3 AUDITOR'S MANAGEMENT REPORT OF ADMINISTRATIVE FINDINGS FINANCIAL AND COMPLIANCE TABLE OF CONTENTS Independent Auditor's Report Scope of Audit Administrative Practices and Procedures Insurance Official Bonds Financial Planning, Accounting and Reporting Examination of Claims Payroll Accounts Position Control Roster Reserve for Encumbrances and Accounts Payable Classification of Expenditures Board Secretary's Records Treasurer's Records Elementary and Secondary Education Act (E.S.E.A)/lmproving America's Schools Act (IASA) as Reauthorized by the No Child Left Behind Act of 2001 Other Special Federal and/or State Projects T.P.A.F. Reimbursement School Purchasing Programs Contracts and Agreements Requiring Advertisement for Bids School Food Service Funds Student Body Activities Pupil Transportation Application for State School Aid Follow-Up on Prior Year's Audit Finding Recommendation Application for State School Aid Summary Enrollment Excess Surplus Calculation Net Cash Resource Schedule - Food Service Tax ID Number

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5 SuPLEE, CLOONEY & COMPANY CERTIFIED PUBLIC ACCOUNTANTS 308 East Broad Street, Westfield, New Jersey Telephone Fax E mail info@scnco.com INDEPENDENT AUDITOR'S REPORT Honorable President and Members of the Board of Education Matawan-Aberdeen Regional School District County of Monmouth Aberdeen, New Jersey We have audited, in accordance with U.S. generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States, the basic financial statements of the Matawan Aberdeen Regional School District in the County of Monmouth for the year ended June 30, 2016, and have issued our report dated October 28, As part of our audit, we performed procedures required by the New Jersey Department of Education, and the findings and results are disclosed on the following pages, as listed in the accompanying table of contents. This report is intended solely for the information of the Matawan Aberdeen Regional School District, County of Monmouth, New Jersey, the New Jersey Department of Education and federal and state audit awarding agencies and is not intended to be and should not be used by anyone other than these specified parties. October 28, 2016 PUBLIC SCHOOL ACCOUNTANT NO

6 Independent Auditor's Management Report of Administrative Findings Financial and Compliance Scope of Audit The audit covered the financial transactions of the Board Secretary/School Business Administrator and Treasurer of School Monies, the activities of the Matawan-Aberdeen Regional School District Board of Education, the records of the various funds under the auspices of the Board of Education. Administrative Practices and Procedures Insurance Insurance coverage was carried in the amounts as detailed in the District's CAFR. (See Exhibit J-20) Official Bonds AMOUNT NAME POSITION OF BOND Kenneth Jannarone Treasurer of School Monies $350, Thomas Venanzi Board Secretary/ School Business Administrator $150, All Employees Blanket Position Bond $1,000, Adequacy of insurance coverage is the responsibility of the Board of Education. Financial Planning, Accounting and Reporting Examination of Claims Our audit of claims paid during the period under review did not indicate any discrepancies with respect to signatures, certification or supporting documentation. Payroll Accounts The net salaries of all employees of the Board were deposited in the Net Payroll Account. Employees' payroll deductions and employer's share of fringe benefits were deposited in the Payroll Agency Account. All payrolls were approved by the Superintendent and were certified by the President of the Board and the Board Secretary/Business Administrator. Salary withholdings were promptly remitted to the proper agencies 2

7 Position Control Roster Independent Auditor's Management Report of Administrative Findings Financial and Compliance The Position Control Roster was reviewed and compared to payroll records, employee benefit records and charges made to the general ledger to ensure proper and consistent financial reporting and that employee benefits are only offered to current employees. Reserve for Encumbrances and Accounts Payable A review of outstanding issued purchase orders was made as of June 30, 2016 for proper classification of orders as reserve for encumbrances and accounts payable. Classification of Expenditures The coding of expenditures was tested for proper classification in accordance with N.J.A.C. 6A: (g) as part of our test of transactions of randomly selected expenditure items. We also reviewed the coding of all expenditures included in our compliance and single audit testing procedures. In addition to selecting a test sample our sample selection specifically targeted administrative coding classifications to determine overall reliability and compliance with N.J.A.C. 6A:23 A-2.4 As a result of the procedures performed, no exceptions were noted. Board Secretary's Records The records maintained by the Board Secretary were in satisfactory condition. Treasurer's Records The records maintained by the Treasurer of School Monies were in satisfactory condition. Elementary and Secondary Education Act of 1965 (E.S.E.A.) I Improving America's Schools (IASA) as Reauthorized by the No Child Left Behind Act of 2001 The E.S.E.A. financial exhibits are contained within the Special Revenue Section of the CAFR. This section of the CAFR documents the financial position pertaining to the projects under Title I, Title II, and Title Ill of the Elementary and Secondary Education Act. 3

8 Independent Auditor's Management Report of Administrative Findings Financial and Compliance Other Special Federal and/or State Projects The District's Special Projects were approved as listed on Schedule A and Schedule B located in the CAFR. Our audit of the federal and state funds on a test basis, indicated that obligations and expenditures were incurred during the fiscal year or project period for which the project was approved. The financial exhibits are contained within the Special Revenue Section of the CAFR. This section of the CAFR documents the financial position pertaining to the aforementioned special projects. T.P.A.F. Reimbursement Our audit procedures included a test of the biweekly reimbursements filed with the Department of Education for district employees who are members of the Teachers' Pension and Annuity Fund. No exceptions were noted. Our audit procedures also included a test of the reimbursement of the employer share of pensions, group life insurance, FICA and other benefits of the Teacher's Pension and Annuity Fund for TPAF members carrying out and paid from federally funded programs in accordance with N.J.S.A. 18A: The District filled out the required form and submitted it for audit. Our test included verification of eligible employees to be included, and, if applicable, a recalculation to verify proper amounts were used. No exceptions were noted. SCHOOL PURCHASING PROGRAMS Contracts and Agreements Requiring Advertisement for Bids N.J.S.A. 18A:18A-1. et seq. states: "a. When the cost or price of any contract awarded by the purchasing agent in the aggregate, does not exceed in a contract year the total sum of $26,000, the contract may be awarded by a purchasing agent when so authorized by resolution of the board of education without public advertising for bids and bidding therefor, except that the board of education may adopt a resolution to set a lower threshold for the receipt of public bids or the solicitation of competitive quotations. If the purchasing agent is qualified pursuant to subsection b of section 9 of P.L c. 198 (C.40A:11-9) the board of education may establish that the bid threshold may be up to $40, Such authorization may be granted for each contract or by a general delegation of the power to negotiate and award such contracts pursuant to this section. b. Commencing in the fifth year after the year in which P. L c. 440 takes effect, and every five years thereafter, the Governor, in consultation with the Department of Treasury, shall adjust the threshold amount and the higher threshold amount which the board of education is permitted to establish as set forth in subsection a. of this section or the threshold amount resulting from any adjustment under this subsection, in direct proportion to the rise or fall of the index rate as that term is defined in N.J.S.A. 18A: 18A-2 and shall round the adjustment to the nearest $1, The Governor shall notify all local school districts of the adjustment no later than June 1 of every fifth year. The adjustment shall become effective on July 1 of every year in which it is made. Any contract made pursuant to this section may be awarded for a period of 24 consecutive months, except that contracts for professional services pursuant to paragraph (1) of subsection a. of N.J.S.A. 18A:18A-5 may be awarded for a period not exceeding 12 consecutive months." 4

9 Independent Auditor's Management Report of Administrative Findings Financial and Compliance SCHOOL PURCHASING PROGRAMS (CONTINUED) Contracts and Agreements Requiring Advertisement for Bids (Continued) N.J.S.A.18A: 18A-4 states, "Every contract for the provision or performance of any goods or services, the cost of which in the aggregate exceeds the bid threshold, shall be awarded only by resolution of the board of education to the lowest responsible bidder after public advertising for bids and bidding therefor, except as is provided otherwise in this chapter or specifically by any other law." The board of education may, by resolution approve by the majority of the board of education and subject to subsections b. and c. of this section, disqualify a bidder who would otherwise be determined to be the lowest responsible bidder, if the board of education finds that it has had negative prior experience with the bidder." Effective July 1, 2015, the bid threshold in accordance with N.J.S.A. 18A:18A-3(a) and (c) is $29, In accordance with N.J.S.A. 40A:11-9 (b) the bid threshold for all purchases made by the District's qualified purchasing agent is $40, The law regulating bidding for public school student transportation contracts under N.J.S.A. 18:39-3 is currently $18, The Board of Education has the responsibility of determining whether the expenditures in any category will exceed the statutory thresholds within the fiscal year. Where question arises as to whether any contract or agreement might result in violation of the statute, the solicitor's opinion should be sought before a commitment is made. Inasmuch as the system of records did not provide for an accumulation of payments for categories for the performance of any work or the furnishing or hiring of any materials or supplies; the results of such an accumulation could not reasonably be ascertained. Disbursements were reviewed, however, to determine whether any clear-cut violations existed. The results of our examination indicated that no individual payments, contracts or agreements were made "for the performance of any work or the furnishing or hiring of any materials or supplies," in excess of the statutory thresholds where there had been no advertising for bids in accordance with the provisions of N.J.S.A.18A: 18A-4. Resolutions were adopted authorizing the awarding of contracts or agreements for "Professional Services" per N.J.S.A.18A: 18A-5. The system of records did not provide for an accumulation of purchases for which the School Board used contracts entered into by the State Department of Purchase and Property pursuant to Ch. 114, P. L. 1977, therefore, the extent of such purchases could not reasonably be ascertained. 5

10 School Food Service Funds Independent Auditor's Management Report of Administrative Findings Financial and Compliance The school food service program was not selected as a major federal and/or State program. However, the program expenditures exceeded $100,000 in federal and/or State support. Accordingly, we inquired of school management, or appropriate s.chool food service personnel, as to whether the SFA had any Child Nutrition Program reimbursement overclaims or underclaims. No exceptions were noted. In addition, we inquired of school management, or appropriate school food service personnel, as to whether the SFA's expenditures of school food service revenues were limited to allowable direct and indirect costs. No exceptions were noted. The financial transactions and statistical records of the School Food Services were reviewed. The financial accounts, meal count records and eligibility applications were reviewed on a test-check basis. Cash receipts and bank records were reviewed for timely deposit. The number of meals claimed for reimbursement was verified against sales and meal count records. As part of the claims review process the edit check worksheet was completed. Reimbursement vouchers were properly computed and timely filed. Meals claimed agreed with the meal count records tested. Applications for free and reduced price meals were reviewed for completeness and accuracy. The number of free and reduced price meals claimed as served did not exceed the number of valid applications on file, times the number of operating days, on a school by school basis. The free and reduced priced meal policy is uniformly administered throughout the School system. The required verification procedures for free and reduced price applications were completed and available for review. Expenditures were separately recorded as food, labor and other costs. Vendor invoices were reviewed and costs verified. Inventory records on food and supply items were currently maintained and properly applied in determining the cost of food and supplies.used. The cash disbursements records reflected expenditures for program related goods and services. The District is depositing and expending program monies in accordance with N.J.S.A. 18A:17-34 and 19-1 through The appropriate revenue and expenditure records were maintained in order to substantiate the non-profit status of the school food service. Provisions of the FSMC contract/addendum were reviewed and audited. The FSMC contract includes an operating results provision which guarantees that the food service program will break even. The operating results provision has been met. Net cash resources did not exceed three months average expenditures. Time sheets were reviewed and labor costs verified. Payroll records were maintained on all School Food Service employees. No exceptions were noted. USDA Food Distribution Program (food and/or commodities) were received and a single inventory was maintained on a first-in, first-out basis. No exceptions were noted. The school district maintains the detailed revenue and expenditure Information necessary in order to execute the USDA mandated Non-Program Food Revenue Tool at least annually. Exhibits reflecting Child Nutrition Program operations are included in the section entitled Enterprise Funds, Section G. 6

11 Independent Auditor's Management Report of Administrative Findings Financial and Compliance Student Body Activities The records for the Student Body Activities were maintained in satisfactory condition. Pupil Transportation Our audit procedures included a test of on roll status reported in the District Report of Transported Resident Students (DRTRS). The information that was included on the DRTRS was verified to the DRTRS Eligibility Summary Report with minor exceptions. The results of our procedures are presented in the Schedule of Audited Enrollments. Our procedures also. included a review of transportation related contracts and purchases. Based on our review, the District complied with proper bidding procedures and award of contracts. No exceptions were noted in our review of transportation related purchases of goods and services. Application for State School Aid Our audit procedures included a test of information reported in the October 15, 2015 Application for State School Aid (A.S.S.A.) for enroll, private schools for the disabled, and low income. We also performed a review of the district procedures related to its completion. The information on the A.S.S.A. was compared to the district workpapers without exception. The information that was included on the workpapers was verified without exception. The results of our procedures are presented in the Schedule of Audited Enrollments. The district maintained workpapers on the prescribed state forms or their equivalent data. The district has adequate written procedures for the recording of student enrollment FACILITIES AND CAPITAL ASSETS Our procedures included a review of the SDA grant agreements for consistency with recording of SDA revenue, transfer of local funds from the general or capital reserve account, and awarding of contracts for eligible facilities construction. FOLLOW-UP ON PRIOR YEAR'S FINDINGS In accordance with government auditing standards, our procedures included a review of the status of prior year audit recommendations. Corrective action was taken on all prior year findings. 7

12 Independent Auditor's Management Report of Administrative Findings Financial and Compliance RECOMMENDATIONS Administrative Practices and Procedures None Financial Planning, Accounting and Reporting None School Purchasing Program None School Food Service None Student Body Activities None Application for State School Aid None Pupil Transportation None Capital Assets and Facilities None Prior Year Audit Findings None 8

13 MATAWAN -ABERDEEN REGIONAL SCHOOL DISTRICT SCHEDULE OF AUDITED ENROLLMENTS APPLICATION FOR STATE SCHOOL AID SUMMARY ENROLLMENT AS OF OCTOBER 15, Application for State School Aid (10/15/15 data) Sample for Verification Reported on Sample Verified per Reported as on Roll Workpapers on Roll Errors Selected from Workpapers Registers on Roll Full Shared Full Shared Full Shared Full Shared Full Shared Private School for Disabled Errors per Reported on Sample Registers AS.SA as for on Roll Private Verifi- Sample Sample Full Shared Schools cation Verified Errors Half Day Preschool 3 years old Full Day Preschool 3 years old Half Day Preschool 4 years old Full Day Preschool 4 years old Half Day Kingergarten Full Day Kindergarten One Two Three Four Five Six Seven Eight Nine <O Ten Eleven Twelve Subtotal u u ~ Sp. Ed. - Elementary Sp. Ed. - Middle School Sp. Ed. - High School Subtotal ~ = ~ = = = Co Voe. - Regular Co. Voe Ft Post Sec. Totals 3, = 3, ~ ---9 ~ Percentage Error ~ ~ ~

14 MATAWAN -ABERDEEN REGIONAL SCHOOL DISTRICT SCHEDULE OF AUDITED ENROLLMENTS APPLICATION FOR STATE SCHOOL AID SUMMARY ENROLLMENT AS OF OCTOBER 15, 2015 Resident Low Income Sample for Verification Resident LEP Low Income Sample for Verification Reported on Reported on Reported on Reported on A.S.S.A. as Workpapers as Sample Verified to A.S.SA as Work.papers as Sample Verified to Low Low Selected from Application Sample LEPlow LEP low Selected from Test Score Sample Income Income Errors Work lae'ers and Register Errors Income Income Errors Work[laE'ers and Register Errors Half Day Preschool 3 years old Half Day Preschool 4 years old Half Day Kindergarten Full Day Kindergarten One Two Three Four Five Six Seven Eight Nine Ten Eleven Twelve " Subtotal Special Ed - Elementary Special Ed - High School Special Ed - Middle Subtotal Totals 1,074 1, Percentage Error 0% -o% QO/o Transportation Reported on Reported on DRTRS by DRTRS by DOE/county District Errors Tested Verified Errors Reg - Public Schools, col. 2 1,008 1, Reg -Sp Ed, col Re- Transported - Non-Public, col Reported Calculated Special Ed Spec, col Avg. Mileage - Regular Including Grade PK students Totals 1,306 1, Avg. Mileage - Regular Excluding Grade PK students Avg Mileage - Special Ed with Special Needs Percentage Error 0%

15 MATAWAN - ABERDEEN REGIONAL SCHOOL DISTRICT SCHEDULE OF AUDITED ENROLLMENTS APPLICATION FOR STATE SCHOOL AID SUMMARY ENROLLMENT AS OF OCTOBER 15, 2015 Resident LEP NOT Low Income Sample for Verification Reported on Reported on A.S.S.A. as Workpapers as Sample Verified to NOT Low NOT Low Selected from Application Sample Income Income Errors Workpapers and Register Errors Half Day Preschool 3 years old Half Day Preschool 4 years old Half Day Kindergarten Full Day Kindergarten One Two Three Four Five Six Seven Eight Nine Ten Eleven Twelve Subtotal Special Ed - Elementary Special Ed - Middle Special Ed - High Subtotal Co. Voe. - Regular Co. Voe. Ft. Post Sec. Totals Percentage Error 0% 0%

16 EXCESS SURPLUS CALCULATION SECTION 1 General Fund Expenditures: Fiscal Year Ended June 30, 2016 Less: On-Behalf TPAF Pension & Social Security Adjusted General Fund Expenditures Excess Surplus Percentage Subtotal Increased by: Extraordinary Aid (Unbudgeted) Non-Public Transportation Aid (Unbudgeted) $312, , $70,201, ,683, ,518, % 1,270, , Maximum Unreserved/ Undesignated Fund Balance $1,598, SECTION 2 Total General Fund Balance Decreased by: Assigned: Year End Encumbrances Designated for Subsequent Year's Expenditures Restricted: Excess Surplus -Designated for Subsequent Year's Expenditures Emergency Reserve Maintenance Reserve Capital Reserve $ $2, , , , $9,654, ,048, Total Unassigned fund Balance 1,606, Reserved Fund Balance-Excess Surplus $7, SECTION 3 Recapitulation of Excess Surplus as of June 30, 2016: Reserved Excess Surplus-Designated for Subsequent Years Expenditures Reserved Excess Surplus $135, , Total $142,

17 MATAWAN-ABERDEEN REGIONAL SCHOOL DISTRICT NET CASH RESOURCE SCHEDULE - FOOD SERVICE FOR THE FISCAL YEAR ENDED JUNE 30, 2016 A School Food Authority is required to maintain a nonprofit School Food Service. The nonprofit status of the School Food Service is determined by evaluating net cash resources. Net cash resources may not exceed three months average expenditures. As Illustrated in the schedule below, the Districts Net Cash Resources ($231,724.53) do not exceed three months average expenditures ($499,423.82). Net Cash Resources: CAFR B-4 B-4 Current Assets* C.ash & Cash Equivelents Accounts Receivable Food Service B-4/5 $200, , CAFR B-4 B-4 B-4 Current Liabilities Less Accounts Payable Less Due to Other Funds Less Unearned Revenue Net Cash Resources (4,925.07) (2,023.50) (18,372.15) $231, (A) Net Adj. Total Operating Expense: B-5 B-5 Tot. Operating Exp. Less Depreciation Adj. Tot. Oper. Exp. $1,670, (5,425.91) $1,664, (B) Average Monthly Operating Expense: B / 10 $166, (C) Three times monthly Average: 3XC $499, (D) TOTAL IN BOX A LESS TOTAL IN BOX D NET $231, ($499,423.82) ($267,699.29) <<--- Excess A is greater than D, cash exceeds 3 X average monthly operating expenses. D is reater than A, cash does not exceed 3 X avera e monthly operatin expenses. * Inventories are not to be included in total current assets. 13

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